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What are the goals of accounting standard setters (like the FASB) when they create GAAP guidance?...

What are the goals of accounting standard setters (like the FASB) when they create GAAP guidance? What are the goals of taxing authorities (like the IRS) when they create tax rules? How do they differ?

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The accounting standard setters like Financial Accounting Standards Board (FASB) sets have certain goals when they create Generally Accepted Accounting Standards(GAAP). The accounting standard setters aim to have uniformity among the financial statements prepared by various firms across the nation. This uniformity in financial statements make them comparable by providing with uniform standards and accounting practices.

The taxing authorities like Internal Revenue Service (IRS) have is a government agency which works with the aim of ensuring compliance of tax laws by various firms in the nation. Such authorities have an aim of creating such policies that maximum revenue is collected in the form of taxes so that there is economic growth in the country.

The accounting standard setters and the taxing authorities differ in their approach. The accounting standard setters have an approach of bringing uniformity in the preparation of financial statements of different firms while the taxing authorities have a major focus on ensuring tax compliance by the firms.

ekkarill92 answered 1 year ago
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